This week, the U.S. consumer price index (CPI) was 0.2% higher than expected, reaching a rate of 8.3%. This shows that the inflation rate is not cooling down after the recent interest rate hikes by the Fed.
In the UK, the consumer price index was 0.2% lower than expected. This can be seen as a bullish sign for GBP, but it is still hanging around the ATH.
The eurozone consumer price index closed at 9.1%, unchanged from the previous month.
Bitcoin fell sharply this week due to poor US inflation numbers. This led to a fall back to the daily demand zone around $18,500 - $19,500. There are two possible scenarios for Bitcoin. The bullish scenario is that Bitcoin will break the $22,800 daily demand zone. In the bearish scenario, Bitcoin will lose this demand zone and face additional liquidity around $16,500 - $18,000. The momentum in the crypto markets will depend on the outcome of the FOMC meeting. There is a possibility that the bad news is already priced in by the recent 10% drop.
Ethereum also saw a decline of about 18% during the week due to the US inflation rate and the Merge. This was a typical "buy the rumor, sell the news" event because Ethereum fell another 10% after the Merge. Currently, Ethereum is at the same structural level as Bitcoin. To stay bullish, Ethereum needs to hold on to the daily demand zone and take out the recent highs. If it loses this demand zone, it will likely take another look at the $1000 region.
Next week will be a tough week for the US dollar. On Wednesday there will be an FOMC meeting to discuss the economic forecast report. This report consists of a projection for inflation and economic growth over the next 2 years, as well as the interest rate projections of each FOMC member.
In addition to the projection, the Fed will also decide on the interest rate. On Thursday, initial jobless claims will be announced, which will give a forecast of the expected numbers for the next nonfarm payrolls (NFP) report.